Summary of today's editorial "Economic World":
Good corporate governance in banks.
Dr. Amirosin Amin Azad; former Director General of Regulations, Banking Licenses and Prohibition of Money Laundering of the Central Bank.
The separation of the board of directors from the executive management is not sufficient for the corporate governance of the banks; Because the actual power structure may be influenced by dominant or ownership shareholders and government authorities.
One of the shortcomings of the current regulations is the excessive reliance on the concept of "a member who is not a CEO, while being a non-CEO is a necessary condition for independence, but not a sufficient condition, and the independent member must be far from any economic, political or managerial ties.
In order to correct this structure, it is proposed that the central bank as regulator will require the presence of truly independent members on the board of directors and the supervisor of banks will determine the proportion of independent members according to characteristics such as concentration of ownership, complexity and systemic importance of each bank.
Also, in order to prevent formalization of the presence of independent members, the regulations should ensure their direct access to information and supervisory tools to provide the ability to deal with conflicts of interest and independent judgment.
The official channel of Donya Akhtaz newspaper.